Ashland Receives “AAA” Credit Rating from Standard & Poor’s
The Town of Ashland announced on Jan. 11 that Standard & Poor’s (S&P) Rating Agency affirmed the town’s “AAA-stable” bond rating, the highest credit rating given to municipalities nationally. This rating is related to future borrowings that are being issued for previously authorized and potential future projects and land acquisitions.
Acknowledging the financial uncertainty during the global Covid-19 pandemic, the report states, “Ashland is operating with very strong budgetary reserves and flexibility, and well-embedded financial management policies, particularly in the areas of budgeting and planning, which should mitigate any significant credit deterioration throughout the pandemic.”
The town recovered from the financial uncertainty presented by the Coronavirus Pandemic, using $1.4 million in stabilization funds, executing $1 million in non-payroll cuts, closing the gap in the anticipated $2.4 million dollar shortfall.
S&P analyzes communities in advance of borrowings to assess the creditworthiness and financial condition of a city or town. They do this by looking at all aspects of the town’s finances, including economy, management, budgetary performance, budgetary flexibility and liquidity, and debt and liability profile.
S&P praised the “very strong economy,” commenting, Ashland’s “market value grew by 5.4 percent over the past year to $3.0 billion in 2020.” Additionally, S&P highlighted, “Very strong management,” “Very strong budgetary flexibility,” “Very strong liquidity,” and a “Strong debt and contingent liability profile.”
The rating includes, “Adequate budgetary performance,” stating, “Budgetary performance metrics include adjustments for recurring transfers and one-time capital expenditures paid for with bond proceeds. In general, over the past several years, operating performance has been robust. Revenues have generally outperformed the budget and management has done well managing costs and building reserves.”
Town Manager Michael Herbert stated, “Bond ratings are critical independent and objective verification of the town’s financial management practices and financial planning. Our ‘AAA’ rating is a testament to the collaborative work environment that we have fostered among the town’s key stakeholders to both set and achieve our financial goals.”
As an “AAA” community, Ashland continues to lead municipalities with a strong institutional framework. Ashland will secure favorable ratings when entering capital markets and leads to taxpayer savings when financing large projects in the future.
Herbert said that the town’s financial success is based on the community’s resilience during the pandemic, the ingenuity of local business owners, the support of local nonprofit organizations, like the Ashland Emergency Fund, as well as the creativity of the town’s financial management team, led by Finance Director Brittany Iacaponi.